Ambrose has indifference curves with the equation x₂ = constant

Question

Ambrose has indifference curves with the equation x₂ = constant - 4x^1/2₁, where larger constants correspond to higher indifference curves.If good 1 is drawn on the horizontal axis and good 2 on the vertical axis, what is the slope of Ambrose's indifference curve when his consumption bundle is (9, 5)? A)-0.67 B)-8 C)-9/5 D)-5/9 E)-3

Quizplus · Accepted Answer

The slope of the indifference curve is given by the derivative of x2 with respect to x1. Differentiating x2 = constant - 4x1/2 with respect to x1 gives the slope as -2x1^(-1/2). At x1 = 9, the slope is -2(9)^(-1/2) = -2/3 = -0.67.

Ambrose Has Indifference Curves with the Equation X2 = Constant